(RTTNews.com) – The European markets ended Friday’s session firmly in negative territory. Continued disappointment over the inaction of the European Central Bank weighed on investor sentiment. Weak economic data from Germany and France, along with disappointing Chinese inflation data, added to the negative mood.
Geopolitical issues also played a role in the pullback Friday, after North Korea confirmed its most powerful nuclear test to date. The test provoked strong reactions from several countries, including the US, China, Russia and Japan.
The European Central Bank left its key interest rates unchanged for a fourth consecutive session yesterday and retained its asset purchases. The decision was in line with economists’ expectations, but some investors were disappointed after ECB President Mario Draghi
revealed in his press conference that policymakers did not even discuss any extension of asset purchases beyond March 2017.
Rosengren said gradual tightening of monetary policy is likely to be appropriate to ensure the U.S. economy remains at the full employment level it is now approaching. Rosengren added that “a failure to continue on the path of gradual removal of accommodation could shorten, rather than lengthen, the duration of this recovery.”
The pan-European Stoxx Europe 600 index weakened by 1.14 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.98 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.01 percent.
The DAX of Germany dropped 0.95 percent and the CAC 40 of France fell 1.12 percent. The FTSE 100 of the U.K. declined 1.19 percent and the SMI of Switzerland finished lower by 0.61 percent.
In Frankfurt, Deutsche Bank soared 3.97 percent on a report that it’s nearing an agreement with the U.S. Department of Justice to settle an investigation into the sale of mortgage-backed securities.
Bayer weakened by 1.22 percent after Bloomberg reported that it is exploring the sale of its dermatology business. The drug-maker is looking to sell peripheral businesses as it pursues a takeover of Monsanto.
In Paris, Total SA shares fell 1.33 percent. The oil major said it is exercising its preemption right to acquire Chesapeake’s 75 percent share in the jointly held Barnett Shale in Texas.
In London, Burberry dropped 2.49 percent after Goldman Sachs removed the stock from its “Focus List.”
Greene King tumbled 6.07 percent. The pub operator warned that trading conditions could get tougher as a result of the recent Brexit vote.
Pub chain JD Wetherspoon climbed 2.44 percent after reporting a 12.5 percent increase in fiscal 2016 pre-tax profit.
Royal Bank of Scotland increased 2.28 percent and Barclays rose 0.89 percent. Lloyds Banking Group gained 0.76 percent and HSBC added 0.82 percent.
Pharmaceutical company Novo Nordisk dropped 2.15 percent in Copenhagen after JP Morgan cut its price target for the stock.
Germany’s exports and imports declined unexpectedly in July, figures from Destatis showed Friday.
Exports dropped 2.6 percent in July from June when it rose 0.2 percent. Shipments were expected to rise 0.3 percent.
Similarly, imports fell 0.7 percent, reversing a 1.1 percent increase a month ago and in contrast to a 0.5 percent rise economists had expected.
The trade surplus fell to a seasonally adjusted EUR 19.4 billion from EUR 21.4 billion in June.
French industrial production declined unexpectedly in July, data from the statistical office Insee revealed Friday. Industrial output fell 0.6 percent month-on-month in July, confounding expectations for an increase of 0.3 percent. This was the third consecutive decrease in production. In June, production had declined 0.7 percent.
UK visible trade deficit narrowed in July from a year ago, broadly in line with economists’ expectations, as exports rose and imports dropped, figures from the Office for National Statistics showed Friday. The deficit on trade in goods narrowed to GBP 11.8 billion from GBP 12.9 billion in June. A year ago, the shortfall was GBP 11.3 billion. Economists had forecast a deficit of GBP 11.7 billion.
British construction output stagnated in July, while economists were looking for a decline, figures from the Office for National Statistics showed Friday. Construction output remained unchanged from June. Economists had expected a 0.5 percent fall.
Consumer prices in China were up just 1.3 percent on year in August, the National Bureau of Statistics said on Friday. That was beneath expectations for 1.7 percent and down from 1.8 percent in July.
With an increase in inventories of durable goods offset by a drop in inventories of non-durable goods, the Commerce Department released a report on Friday showing that total inventories of merchant wholesalers were flat in the month of July.
The Commerce Department said wholesale inventories were virtually unchanged in July after rising by 0.3 percent in June. Inventories had been expected to inch up by 0.1 percent.
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